PUCO approves electric security plan for FirstEnergy

COLUMBUS, OHIO (March 25, 2009) – The Public Utilities Commission of Ohio (PUCO) today approved a supplemental agreement that establishes an electric security plan (ESP) for FirstEnergy. The term of the ESP is April 1, 2009 through May 31, 2011.

“I am pleased that the parties came together to resolve the issues raised throughout these proceedings,” PUCO Chairman Alan R. Schriber stated. “The ESP we are approving today will benefit all of FirstEnergy’s customers by providing stable and predictable rates while also continuing to advance economic development, energy efficiency and smart grid initiatives.”

Under the ESP, retail generation rates from June 1, 2009 through May 31, 2011 will be determined through a competitive bid process. The competitive bid process will be conducted by an independent bid manager. Beginning June 1, 2009, the Commission will have the option of phasing-in the generation prices from the competitive bid process, if deemed necessary. FirstEnergy’s distribution rates will be frozen through Dec. 31, 2011.

As part of the supplemental agreement, FirstEnergy has agreed to commit $25 million to economic development in Ohio over the next three years. FirstEnergy will also continue its existing green resource program that allows customers to purchase renewable energy credits each month. Also during the ESP, FirstEnergy will participate in a collaborative that will develop energy efficiency and demand-side management programs.

FirstEnergy will also develop a proposal to apply for available federal funds under the Economic Recovery Act that may be available for smart grid investment. The supplemental agreement also provides for the creation of a collaborative before the filing of any future market rate offer (MRO) or ESP that contains a competitive bidding process.

On July 31, 2008, FirstEnergy filed applications for an ESP and a MRO. On Nov. 25, 2008, the Commission denied FirstEnergy’s application to establish a MRO. On Dec. 19, 2008, the Commission modified and adopted an ESP for FirstEnergy. On Dec. 22, 2008, FirstEnergy filed notice with the Commission that it was withdrawing and terminating its ESP application. On Jan. 14, the Commission approved FirstEnergy’s application to recover purchased power costs subject to a prudency review by the Commission.

On Feb. 19, 2009, FirstEnergy filed an amended electric security plan application with an attached stipulation and recommendation. An evidentiary hearing took place on Feb. 25, 2009 addressing the limited term ESP. On Feb. 26, 2009, the parties submitted a supplemental stipulation. On March 4, 2009, the Commission adopted a limited-term ESP for FirstEnergy.

On May 1, 2008, Gov. Ted Strickland signed SB 221 into law, marking the one year anniversary of the date he outlined his Energy, Jobs, and Progress Plan to stabilize electricity prices, create jobs, and expand Ohio’s green

energy industry. SB 221 became effective on July 31, 2008 and incorporates a system under which rates would be set by the PUCO and outlines a path for electric utilities to implement market-based pricing.

A copy of today’s Commission second opinion and order is available at www.PUCO.ohio.gov. Click on the link to the Docketing Information System (DIS) and enter the case number 08-935-EL-SSO.

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